The article discusses issues related to application of distance protection schemes in a nonstandard environment - distribution networks with dispersed generation. This type of relay is considered as a reasonable alternative to overcurrent devices susceptible to presence of upstream power flows and replacement for voltage protection of distributed generation (DG) units restricting their fault ride through (FRT) capability. The study method is performed through analyses of relay responses to different fault types and locations, and coordination between them during various scenarios. It has disclosed adequacy of security provided by impedance relays during normal and abnormal events in the system, and it has also been revealed limitations for their application. Conclusions provide general recommendations and establish fields for further investigations.